In the last issue of Lider, I wrote about the troubles of Ivica Haluga as he navigated the bureaucratic maze. It took this pig farmer ten years to obtain a building permit for his pig farm in Mičevac near Velika Gorica. In this ‘Justice’ section, I would like to highlight the issue of medium-sized OPGs, which seem to be neither here nor there.
Anđelka Pejaković, head of the Advisory Service of Zagreb County, shared this with me, as she recently hosted me for a report on that service. Speaking about traditional farms, which are better than other OPGs due to their experience and support from older family members, she emphasized that it seems to her that medium-sized ones fare the worst in terms of financing.
– They receive the least money, yet they are quite stable. Large ones receive funding because they have such projects. Namely, the measures for rural development are such that the larger the agricultural entity, the more employees it has, the more points it gets, and the easier it is to access funds. For small OPGs, there are measures worth up to about 30,000 euros, but there are no specific measures for medium-sized ones. They cannot compete for money intended for small ones, and it is very difficult for them to compete with large ones in tenders – Pejaković told me.
There is nothing to seek
Indeed, let us imagine a medium-sized OPG, like Haluga’s pig farm. Its capacity is 120 sows and between 2,500 and 3,000 fatteners per year. If it were to compete with Belje, which has more than ten thousand pigs on just one farm, or with the Klisa farm owned by the Žito group, which has a capacity of nine thousand fatteners with an annual fattening of 25,200 pigs, it is clear that Haluga would have no chance against such large systems. It is difficult for him to obtain funding even against smaller farms than those of Belje and Žito.
On the other hand, his farm is too large for the rural development measures that assist small farms. And that is why such medium-sized OPGs, like Haluga’s, are ‘neither here nor there’, as the saying goes. Pejaković believes, and it is common sense, that we should encourage these medium-sized OPGs because they are much more stable than small ones. First of all, they are financially stronger, do not have to wait for state aid to invest, and have production and results behind them that can convince banks to finance them until the money from EU funds arrives.
Secondly, they invest in technology. Haluga’s farm, as we have seen, is a marvel of technology (for us laymen), as it has everything from technological feeding operations (it accurately doses how much feed is needed) to cooling systems to ensure the pigs are comfortable. Objectively, small OPGs cannot afford this because their farms are part of their homes, and because it is too expensive an investment (it is questionable when it will pay off), and on the other hand, even if someone were to gift them this technology, it is still questionable whether such production would be profitable with a small number of fatteners and sows, considering that the mentioned technological systems also have higher costs. Or they might be in the ‘plus’, but the question is how much such a business could generate profit to ensure a decent living.
An appeal to the Ministry
Tomislav Haluga (his father Ivica transferred ownership of the OPG to him) has survived, is now doing well, and despite all the hardships, he has managed to access EU funds and is an example of a successful entrepreneur. There are more such medium-sized OPG owners, producers of various agricultural crops, but why settle for what we have now when we could have more of them?! Therefore, an appeal to the leading figures in the Ministry of Agriculture: try to devise additional programs that will encourage investments in medium-sized OPGs.
Indeed, this will not be simple as the European Commission has sent a proposal for a drastically reduced agricultural budget. Thus, for Croatian agriculture in the new programming period (2028 – 2034) of the CAP, 3.7 billion euros in subsidies is planned, compared to 4.99 billion euros in the previous period, and it is expected that the Rural Development Fund will also be poorer. Nevertheless, the Ministry should certainly put medium-sized OPGs on the agenda.
POST SCRIPTUM
When I mentioned that banks would sooner follow medium-sized OPGs than small ones, it should be noted that Ivica Haluga said that bankers were very cautious when deciding whether to grant him credit. However, this was expected as he had just started a larger business with pig fattening, and of course, bankers could not check the history of his business. But I am convinced that now, as he is slowly getting on his feet and showing results (the farm opened last June), bankers will find it much easier to finance him than small farmers.
